Overtime, Bonuses & Second Jobs
- How are overtime pay, bonuses etc. taxed?
- Do I pay tax on everything I earn?
- Holiday Work- Am I Taxable?
- What should I do if I take up a second job?
- What should I do if I have multiple employments within a Tax Year?
How are overtime pay, bonuses etc. taxed?
Your weekly/monthly tax credits are set against your full weekly/monthly pay. If you earn overtime or bonus pay etc., these amounts are included as part of your pay for that week or month. You do not get any additional tax credits against these additional earnings.
Do I pay tax on everything I earn?
Your weekly/monthly wage is taxed at the standard rate of tax up to your weekly/monthly cut off point; any income in excess of your cut off point is taxed at the higher rate of tax. Your weekly/monthly tax credits are offset against this gross tax to give you your tax payable figure.
Holiday work - am I taxable?
Holiday work or part-time work is taxable in the same way as any other employment.
If your gross tax is less than your tax credits, you will not have to pay tax - provided you have applied for a certificate of tax credits. If you have paid tax but you are entitled to additional credits you may claim a refund of some or all of the tax paid.
If you paid tax and are returning to school or college you may be able to claim a refund from your local Revenue office of some or all of the tax paid depending on your level of income and unused tax credits. To claim a refund you should ask your tax office for 
Form P50 - First Claim for Tax Repayment during Unemployment (PDF, 136KB) and send it with your form P45 to your local Revenue office.
What should I do if I take up a second job?
It is important to avoid being put on emergency basis of tax in a situation where you have a job or pension and you take up a second job. Your first employer will already have instructions from Revenue, which gives you all the Tax Credits and Standard Rate Cut-Off Point (SRCOP) to which you are entitled. Unless you advise Revenue to issue new certificates, one to each employer, allocating the Tax Credits and SRCOP between the two employments, as required by you, your new employer is obliged to deduct tax on the emergency basis, when paying wages or salary. This will mean that you will benefit from more tax credits than you are entitled to, resulting in an underpayment of tax, which will have to be paid by you at the end of the tax year. Therefore it is essential to notify Revenue immediately on taking up a second employment in order to get a Tax Credit Certificate issued to each employer.
What should I do if I have multiple employments within a Tax Year?
As stated above, to avoid paying incorrect amounts of tax you will require a Tax Credit Certificate for each of your employments. You can allocate your Tax Credits and SRCOP between your employments within a Tax Year to best suit your employment pattern or the level of your earnings with each employer. Revenue can issue Tax Credit Certificates to suit every pattern. These can be:
- Cumulative Tax Credit Certificates
In normal circumstances a Tax Credit Certificate is issued on what is known as a “cumulative” basis. In other words the tax credits and SRCOP accumulate each week. - Nil Tax Credit Certificates
A nil Certificate is a Tax Credit Certificate with no tax credits and no SRCOP. When a nil certificate issues, it indicates to the employer to tax the employee on all of their earnings at the highest rate of tax, 41%.
In the circumstances where you are using all your tax credits and SRCOP in one employment and commence a second employment Revenue can issue your new employer with a Nil Tax Credit Certificate on a Week One Basis. If you take up a second employment and allocate some of your tax credits and/or SRCOP to the second employment, this will mean a reduction in the tax credits and SRCOP for your first employment. Therefore Revenue will issue a new tax credit certificate in respect of your first employment on a week 1 basis - Week 1 Basis Tax Credit Certificates
Week 1 Basis means that your tax credits and SRCOP do not accumulate from week to week over the tax year. Your tax will be calculated on a week- to-week basis until the end of that tax year. For more details on week 1 basis certificates please see: Week 1 Basis Certificates
In the following 3 examples, showing different scenarios within each example, we will illustrate ways of allocating your Tax Credits and SRCOP efficiently between your employments.
Remember, these are only examples of Tax Credits and SRCOPs. Your own personal amounts are printed on your most up-to-date Tax Credit Certificate.
Example 1
Scenario 1 – One employment
Seán is a PAYE employee. He is single and is entitled to the following tax credits and Standard Rate Cut-Off Point (SRCOP) in 2010:
| Tax Credits | |
|---|---|
| Single Person's Tax Credit | €1,830 |
| Employee (PAYE) Tax Credit | €1,830 |
| Trade Union Subscriptions | €70.00 |
| Total Credits Per year | €3,730 per annum (€71.74 per week) |
| Standard Rate Cut-Off Point | €36,400 per annum (€700 per week) |
A Tax Credit Certificate showing these tax credits and SRCOP issued to Seán. His employer received notification of the total amounts. Seán earns €300 per week. His weekly figure of tax is calculated as follows:
| Step | Taxable Pay €300 | |||
|---|---|---|---|---|
| 1 | Tax @ 20% | €300.00 | €60.00 | Apply standard rate 20% up to a maximum of the SRCOP (€700.00) as advised by Revenue in the Tax Credit Certificate |
| 2 | Tax @ 41% | Nil | Nil | As Seán’s weekly earnings (€300.00) are below his weekly SRCOP (€700.00), he will not pay tax at the higher rate of 41% this week |
| 3 | Gross Tax | €60.00 | Add the figure of tax due at standard rate to the figure of tax due at the higher rate (if any) | |
| 4 | Less Tax Credit | (€71.74) | Tax credit advised by Revenue in the Tax Credit Certificate | |
| Net tax payable by Seán this week in this employment | Nil | Gross tax less tax credits. As Seán’s weekly tax credits (€71.74) exceed his weekly gross tax (€60.00), he is not due to pay tax this week. | ||
Senario 2 - Two employments
Seán commences a second employment. This employment will run concurrent with his main employment. He will earn approximately €190.00 in this second employment. As Seán has a weekly tax credit of €71.74 of which he has used €60.00 in his main employment he has allocated the balance €11.74 to this second employment. As €300.00 of his weekly SRCOP of €700.00 is used in his main employment he has now allocated €190.00 per week of the balance to his second employment.
| Step | Weekly Taxable Pay €190.00 with second employment | |||
|---|---|---|---|---|
| 1 | Tax @ 20% | €190.00 | €38.00 | Apply standard rate 20% up to a maximum of the SRCOP allocated (€190.00) as advised by Revenue in the Tax Credit Certificate |
| 2 | Tax @ 41% | Nil | Nil | As Seán’s weekly earnings (€190.00) are equal to his weekly SRCOP (€190.00), he will not pay tax at the higher rate of 41% this week |
| 3 | Gross Tax | €38.00 | Add the figure of tax due at standard rate to the figure of tax due at the higher rate (if any) | |
| 4 | Less Tax Credit | (€11.74) | Tax credit advised by Revenue in the Tax Credit Certificate | |
| Net tax payable by Seán this week in this employment | €26.26 | Gross tax less tax credits. As Seán’s weekly tax credits allocated to this employment (€11.74) is less than his weekly gross tax (€38.00), he is due to pay tax this week of €26.26 | ||
Senario 3 - Three employments
Seán commences a third employment. This employment will run concurrent with his other two employments. He will earn approximately €280.00 per week in his third employment. As Seán’s weekly tax credit of €71.74 is fully used in his first two employments he has no unused tax credits available for allocation to his third employment. As he has already used €490.00 (€300 + €190) of his weekly SRCOP of €700.00 in his first two employments, he contacts Revenue to issue a Tax Credit Certificate to his third employment showing Nil Tax Credits and a SRCOP of €210.00 per week.
| Step | Weekly Taxable Pay €280.00 with third employment | |||
|---|---|---|---|---|
| 1 | Tax @ 20% | €210.00 | €42.00 | Apply standard rate 20% up to a maximum of the SRCOP allocated (€210.00) as advised by Revenue in the Tax Credit Certificate |
| 2 | Tax @ 41% | €70.00 | €28.70 | As Seán’s weekly earnings (€280.00) exceed his weekly SRCOP (€210.00), he will be liable on €70.00 at the higher rate of 41% this week |
| 3 | Gross Tax | €70.70 | Add the figure of tax due at standard rate to the figure of tax due at the higher rate | |
| 4 | Less Tax Credit | €0.00 | Tax credit advised by Revenue in the Tax Credit Certificate | |
| Net tax payable by Seán this week in this employment | €70.70 | Gross tax less tax credits. As Seán’s weekly tax credits allocated to this employment is €0.00, He is due to pay tax this week of €70.70 | ||
Senario 4 - Four employments
Seán occasionally works in a fourth employment. As Seán has fully used all his Tax Credits and SRCOP in his other employments he requests Revenue to issue him with a Nil Tax Credit Certificate.
| Step | Weekly Taxable Pay €200.00 with fourth employment | |||
|---|---|---|---|---|
| 1 | Tax @ 20% | €0.00 | Apply standard rate 20% up to a maximum of the SRCOP allocated. As this is NIL there is no liability at 20% | |
| 2 | Tax @ 41% | €200.00 | €82.00 | As Seán’s weekly earnings (€200.00) exceed his weekly SRCOP (€0.00), he will be liable to pay tax at the higher rate of 41% this week |
| 3 | Gross Tax | €82.00 | Add the figure of tax due at standard rate to the figure of tax due at the higher rate | |
| 4 | Less Tax Credit | (€0.00) | Tax credit advised by Revenue in the Tax Credit Certificate which in this employment is NIL | |
| Net tax payable by Seán this week in this employment | €82.00 | Gross tax less tax credits. As Seán’s weekly tax credits allocated to this employment is (€0.00) he is due to pay tax this week of €82.00 | ||
If Seán finishes with any of the above employments he will receive a form P45 (cessation certificate) from that employer. If he wishes he can submit the P45 to Revenue requesting to transfer any unused tax credits and SRCOP from the ceased employment to any of the active employments. Or he may wish to retain the P45 until the end of the tax year (31 December) and submit it along with his P60’s (end of year certificate of earnings) from his other employments, requesting Revenue to review his tax affairs for that tax year.
Example 2
Scenario 1 – One employment
Mary is a PAYE employee. She is single and is entitled to the following tax credits and Standard Rate Cut-Off Point (SRCOP) in 2010:
| Tax Credits | |
|---|---|
| Single Person's Tax Credit | €1,830 |
| Employee (PAYE) Tax Credit | €1,830 |
| Trade Union Subscriptions | €70.00 |
| Total Credits Per year | €3,730 per annum (€71.74 per week) |
| Standard Rate Cut-Off Point | €36,400 per annum (€700.00 per week) |
A Tax Credit Certificate showing these tax credits and SRCOP issued to Mary. Her employer received notification of the total amounts. In Mary’s main employment she earns €875.00 per week. Her weekly figure for tax is calculated as follows:
| Step | Weekly Taxable Pay €875.00 | |||
|---|---|---|---|---|
| 1 | Tax @ 20% | €700.00 | €140.00 | Apply standard rate 20% up to a maximum of the SRCOP (€700.00) as advised by Revenue in the Tax Credit Certificate |
| 2 | Tax @ 41% | €175.00 | €71.75 | As Mary’s weekly earnings (€875.00) are higher than her weekly SRCOP (€700.00), she is liable to pay tax at the higher rate of 41% on €175 of her income this week |
| 3 | Gross Tax | €211.75 | Add the figure of tax due at standard rate to the figure of tax due at the higher rate | |
| 4 | Less Tax Credit | (€71.74) | Tax credit advised by Revenue in the Tax Credit Certificate | |
| Net tax payable by Mary this week in this employment | €140.01 | Gross tax less tax credits. As Mary’s Gross Tax due (€211.75) exceeds her weekly tax credit (€71.74), she is due to pay tax this week of €140.01. | ||
Scenario 2 – Two employments
Mary commences a second employment. This second employment will be for one day a week. Her weekly salary will be €150.00. As Mary is using all her weekly tax credits and SRCOP in her main employment she has requested Revenue to issue a Nil Tax Credit Certificate to her second employment. Her weekly figure for tax is calculated as follows:
| Step | Weekly Taxable Pay €150.00 with second employment | |||
|---|---|---|---|---|
| 1 | Tax @ 20% | €0.00 | Apply standard rate 20% up to a maximum of the SRCOP (€0.00) as advised by Revenue in the Tax Credit Certificate | |
| 2 | Tax @ 41% | €150.00 | €61.50 | As Mary is using all of her weekly SRCOP of €700.00 in her main employment all her earning with this employment are liable for tax at 41% |
| 3 | Gross Tax | €61.50 | Add the figure of tax due at standard rate to the figure of tax due at the higher rate | |
| 4 | Less Tax Credit | (€0.00) | As Mary is using all of her weekly tax credits in her main employment she has no available tax credits to allocate to this employment | |
| Net tax payable by Mary this week in this employment | €61.50 | Gross tax less tax credits. | ||
Example 3
Scenario 1 – One employment
Mark is a PAYE employee. He is married and the only spouse in employment. He is entitled to the following tax credits and SRCOP in 2010:
| Tax Credits | |
|---|---|
| Married Person's Tax Credit | €3,660 |
| Employee (PAYE) Tax Credit | €1,830 |
| Total credits per annum | €5,490 per year (105.58 per week) |
| Standard Rate Cut-Off Point | €45,400 per annum (€873.08 per week) |
A Tax Credit Certificate showing these tax credits and SRCOP issued to Mark. His employer received notification of the total amounts. Mark earns €560.00 per week. His weekly figure of tax is calculated as follows:
| Step | Weekly Taxable Pay €560.00 | |||
|---|---|---|---|---|
| 1 | Tax @ 20% | €560.00 | €112.00 | Apply standard rate 20% up to a maximum of the SRCOP (€873.08) as advised by Revenue in the Tax Credit Certificate |
| 2 | Tax @ 41% | €0.00 | €0.00 | As Mark’s weekly earnings (€560.00) are below his weekly SRCOP (€873.08), he will not pay tax at the higher rate of 41% this week |
| 3 | Gross Tax | €112.00 | Add the figure of tax due at standard rate to the figure of tax due at the higher rate (if any) | |
| 4 | Less Tax Credit | (€105.58) | Tax credit advised by Revenue in the Tax Credit Certificate | |
| Net tax payable by Mark this week in this employment | €6.42 | Gross tax less tax credits. As Mark’s weekly tax credits (€105.58) is lower than his weekly gross tax (€112.00), he is due to pay tax this week of €6.42 | ||
Scenario 2 – Two employments
Mark commences a second employment which will run concurrent with his first employment. In his second employment he will also earn €560.00 per week. As all his tax credits are utilised in his main employment Mark has requested Revenue to transfer his unused SRCOP (€313.08) to his second employment.
| Step | Weekly Taxable Pay €560.00 with second employment | |||
|---|---|---|---|---|
| 1 | Tax @ 20% | €313.08 | €62.62 | Apply standard rate 20% up to a maximum of the SRCOP (€313.08) as advised by Revenue in the Tax Credit Certificate |
| 2 | Tax @ 41% | €246.92 | €101.24 | As Mark’s weekly earnings (€560.00) are higher than his weekly SRCOP (€313.08), he will be liable to pay tax at the higher rate of 41% on €246.92 |
| 3 | Gross Tax | €163.86 | Add the figure of tax due at standard rate to the figure of tax due at the higher rate | |
| 4 | Less Tax Credit | (€0.00) | Tax credit advised by Revenue in the Tax Credit Certificate | |
| Net tax payable by Mark this week in this employment | €163.86 | Gross tax less tax credits. As Mark’s weekly tax credit is Nil he is due to pay tax of €163.86 in this employment this week | ||
Working on the above figures Mark’s total tax bill in any week from both of his employments will be:
| Employment 1 | Employment 2 | Totals | |
|---|---|---|---|
| Salary | €560.00 | €560.00 | €1120 |
| Tax Due | €6.42 | €163.86 | €170.28 |
Mark would like to spread his Weekly Tax liability evenly between both of his employments. This will mean that he will receive new Tax Credit Certificates for both employments. However, because he has reduced the tax credits and SRCOP allocated to the first employment the Tax Credit Certificate for that employment will be issued on a Week 1 Basis.
In both of his employments his weekly tax liability will be as follows:
| Step | Weekly Taxable Pay €560.00 | |||
|---|---|---|---|---|
| 1 | Tax @ 20% | €436.54 | €87.31 | Apply standard rate 20% up to a maximum of the SRCOP (€436.54) as advised by Revenue in the tax credit certificate |
| 2 | Tax @ 41% | €123.46 | €50.62 | As Mark’s weekly earnings (€560.00) are greater than his weekly SRCOP (€436.54), he will be liable to pay tax at the higher rate of 41% this week on €123.46 of his salary |
| 3 | Gross Tax | €137.93 | Add the figure of tax due at standard rate to the figure of tax due at the higher rate | |
| 4 | Less Tax Credit | (€52.79) | Tax credit advised by Revenue in the Tax Credit Certificate | |
| Net tax payable by Mark this week in this employment | €85.14 | Gross tax less tax credits. As Mark’s weekly tax credits (€52.79) is lower than his weekly gross tax (€137.93), he is due to pay tax this week of €85.14 | ||
Working on the above figures Mark’s total tax bill in any week from both employments will be:
| Employment 1 | Employment 2 | Totals | |
|---|---|---|---|
| Salary | €560.00 | €560.00 | €1120 |
| Tax Due | €85.14 | €85.14 | €170.28 |
